Pulse weekly outlook: Green pea premium to erode with acreage increase

Pulse weekly outlook: Green pea premium to erode with acreage increase

MarketsFarm — Green peas continue to command a sizeable premium over their yellow counterparts in Western Canada, which should see acreage shift this spring and an eventual rebalancing of the price spread.

Green peas usually trade at a premium to yellow peas due to higher quality specs and concerns over bleaching, but the current price spread is rather wide.

“There are very few green peas around, and a market that’s looking for them,” said broker Dale McManus of Johnston’s Grain.

Yellow peas were currently priced at $6.50-$7.25 per bushel delivered, he said, and green peas nearly double that at $11-$12.50 per bushel.

Top-end green pea prices have risen by about $4 per bushel over the past year, while yellow peas held relatively steady, according to pricing information from Prairie Ag Hotwire.

In addition to tight supplies of green peas, there is also a relative abundance of yellow peas as they were harder hit by trade restrictions with India.

The latest estimates from Agriculture and Agri-Food Canada predict farmers will seed a similar amount of peas in 2019 than the 3.6 million acres planted in 2018.

McManus agreed the area would likely hold steady, but expected the large old-crop premium for green peas would see green peas take up a larger percentage of the acreage base.

While yellow peas will still account for the majority of pea acres, an increase in green pea area “will have an effect on the price come fall,” said McManus.

New-crop green pea bids of about $7.50-$8.50 per bushel are only slightly above yellow peas at around $6.60-$7 per bushel, according to Prairie Ag Hotwire data.

— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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